BNIM project exposed faults in how KC handles incentives and petitions

BNIM announced Thursday it won’t put its new headquarters in an empty building at 1640 Baltimore Ave.
BNIM announced Thursday it won’t put its new headquarters in an empty building at 1640 Baltimore Ave. jsleezer@kcstar.com

The death of the BNIM project in the Crossroads Arts District is indeed “disheartening,” as Mayor Sly James says.

But it also does not come as a big surprise. This kind of disaster over an incentive-backed deal has been brewing for years in Kansas City.

It’s unfortunate that the architectural firm will not move forward with plans to renovate a building at 1640 Baltimore Ave. into its corporate headquarters and an energy-efficient demonstration project. We are confident the company will find another suitable location soon in the Kansas City area.

Thursday’s developments occurred partly because City Hall has never made the kind of substantial changes required to improve its various taxpayer subsidy programs.

As the testy and failed negotiations over the BNIM project clearly illustrated, the city has failed to engage in sufficiently collaborative discussions with other taxing jurisdictions — especially counties, libraries and school districts — that stand to lose future tax revenues when the city approves a public incentive.

The taxing entities aren’t perfect. Sometimes they engage in behind-the-scenes discussions that surprise one another when it comes time to sign onto an incentive deal.

The city also continues to paper over structural problems with its many assistance programs. A test that’s supposed to measure whether a project would proceed “but for” a public incentive is widely mocked, by development lawyers and city officials, as being too easy to game.

Elected officials all too often approve giving out maximum benefits to projects requested by developers.

And the city continues to pump money into already revived areas — including downtown and the Country Club Plaza district — while few projects benefit from such subsidies east of Troost Avenue or other underdeveloped parts of the core.

The flaws of Kansas City’s initiative petition process also came into sharp focus during this debate as well. The Star has long supported the right of citizens to petition City Hall. But city rules have made it extremely easy for a limited number of upset people to do that.

The signatures of 10 percent of the people who voted in the last mayoral election are required to put a valid petition before the City Council. And because so few people went to the polls in 2015, opponents needed to gather barely more than 4,300 signatures from qualified voters to put a roadblock in front of the BNIM deal.

The council tried to find a compromise that would appease the petitioners while allowing the deal to go ahead. But the group that controlled the petition said it flatly opposed using taxpayer incentives to renovate a building owned by the developer Shirley Helzberg in the Crossroads.

If the BNIM project had been proposed for a more impoverished area of the city, the petition likely would never have been filed. And the incentives would have been easily granted.

What occurred Thursday will send a chill through part of the city’s development community.

Will petitions be used as a threat to derail everything the City Council wants to do? Already, the city is battling in court to keep an initiative from forcing a public vote on incentives awarded for a large downtown hotel.

A change to make the initiative process a little more difficult should be reviewed, though it, too, would require voter approval.

But the most crucial lesson of the BNIM debacle is that City Hall needs to revise substantially how it doles out public dollars to private developers.